Have you taken a look at how much fresh water is consumed in the production of Ethanol?
"Micro algaes present the best option for producing biodiesel in quantities sufficient to completely replace petroleum. While traditional crops have yields of around 50-150 gallons of biodiesel per acre per year, algaes can yield 5,000-20,000 gallons per acre per year. Algaes grow best off of waste streams . agricultural, animal, or human. Some other studies have looked into designing raceway algae ponds to be fed by agricultural or animal waste."
Not only will the production of ethanol (on the scale to make it a worthwhile endeavor) use a lot of water but it will consume almost as much fuel as is ultimately produced. So bascially when you deduct the amount of fuel required to run those tractors, grain elevators, center-pivot irrigators, transportation, etc., etc., you end up with very little surplus fuel to actually put on the market. Certainly not enough to make a sizeable dent in our need to import.
If you listen while your pumpin'$3 water into your tank, you can hear big oil laughin' their a$$es off.